Metal Tiger (LSE:MTR) finished up 3.5pc to 1.3p on Monday after announcing that major institutional backer Sprott Capital Partners will support it in a £3m fundraise.
The Botswana-focused mining investment business has signed a non-binding term sheet that will see Sprott act as finders on its behalf for a non-brokered private placement. Based in Toronto, Sprott is one of the world’s largest dedicated natural resources investors. Its affiliate company Exploration Capital Partners is Metal Tiger’s biggest shareholder, with a 10.2pc stake (as at October 2018).
As part of the placing, nearly 207m Metal Tiger shares will be placed at 1.45p each, an 11.5pc premium to their middle market closing price on Friday last week. Alongside this, subject to Sprott raising the required funds, up to 103.5m warrants will be issued with an exercise price of 2p each and a term date of two years. The Sprott offering will only be available to certain accredited investors and is expected to close on or before 8 March 2019.
Speaking to MiningMaven, Metal Tiger chief executive Michael McNeilly called the continuing endorsement of Sprott a ‘fantastic sign’ for the company.
‘We are delighted to have entered into the Sprott Term Sheet to raise up to an additional c.£3.0 million. Such additional funding will provide yet further support to our strategy, and we look forward to updating shareholders in this regard,’ he said.
‘It not only emphasises Sprott’s interest in getting more exposure to the Kalahari Copper Belt (KCB), a highly sought-after copper opportunity, but also in Metal Tiger’s wider portfolio and management. We look forward to working closely with them as we continue to realise the potential of our Botswana projects well as the rest of our high-impact portfolio.’
Separately to the Sprott raise, Monday also saw Metal Tiger launch a further £1m placing to new and existing investors. This is also taking place at 1.45p a share with 2p warrants attached for every two placing shares purchased.
A number of the company’s director will take part in this raise, including McNeilly and non-executive chairman Charles Hall, who will invest £14,500 and £58,000 respectively. Furthermore, Dianne Grammer, the wife of non-executive director Terry Grammer, will purchase £137,500 worth of shares.
Metal Tiger said the proceeds would be used alongside existing cash resources to support its projects in the KCB. This includes the firm’s joint ventures with MOD Resources and Kalahari Metals (KMI). Metal Tiger has the right to acquire up to 50pc of KMI under an investment agreement established last June.
On Monday, McNeilly added: ‘We are very pleased with the level of support we have received in respect of the Placing from new and existing investors. The Placing will enable Metal Tiger to, among other things, enter into constructive negotiations with Kalahari Metals, regarding the Company potentially providing further financing for proposed exploration drilling at the Okavango and Ngami projects. It will also allow us to continue to take advantage of opportunities that are identified by the Company.’
Last week, KMI revealed a series of drill-ready targets from the second phase of its airborne geophysics survey over two areas in the KCB called the Ngami copper project (NCP) and the Okavango copper project (OCP). The firm also doubled its exploration landholding in the KCB last November through an earn-in agreement with Resource Exploration and Development. This saw it acquire an interest in five recently granted exploration licences with a total area of 4,661km2. It now holds interests in 12 exploration licences covering 8,724km2 in the structure.
Speaking to Mining Maven in December, McNeilly said the acquisition makes Metal Tiger the company with the biggest landholdings in the KCB globally. Alongside its indirect stake in KML, it is part of an exploration joint venture with MOD Resources that owns permits covering 8,000km2 in the area. It is also MOD’s largest shareholder, giving it significant exposure to the upside on offer at T3 without the burden of cash calls as the project develops.
‘We are a very highly leveraged play for a district that at some point is likely to be acquired by a mid-tier or subject to finding enough copper, a large-cap mining company,’ McNeilly told us.
Author: Daniel Flynn
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